Gold prices have rebounded, but has the trend reversed?
Gold prices fell 2.6% this week, marking the largest weekly drop in six weeks.
The rebound is real, but has the trend reversed? It's too early to draw conclusions.
As shown in the chart: We remain bearish on gold prices.
The US has launched airstrikes against Iran for the seventh consecutive night, with both sides expanding the scope of their attacks. The US attacked bridges in Iran, while Iran attacked power and desalination facilities in Kuwait.
US-Iran conflict → Soaring oil prices → Soaring inflation → Rising expectations of interest rate hikes → Falling gold prices
Although gold prices have corrected nearly 30% from their highs, net long positions in the market remain near historical highs, and institutional long positions are highly concentrated.
What does this mean?
The market is well-funded, and the risk of long positions "uncoupling" remains. If the market continues to correct, these funds may further liquidate their positions and exit the market, thereby exacerbating market volatility.
$4,000 is a key psychological level. If gold prices break below this level and continue to fall, short-term downward pressure could intensify.
Conversely, this also indicates strong support below.
Technical Analysis: The short-term rebound is a "correction," not a "reversal."
The biggest problem facing gold is not whether the price decline is sufficient, but whether the correction period is insufficient.
Previous upward cycle: 121 weeks
Current correction to date: Only 24 weeks
Historically, a correction needs to be at least 38.2% of a sustained upward cycle, or approximately 46 weeks, to be considered sufficient.
In other words, gold prices could fluctuate within the $3600 to $4400 range for more than six months.
Expected Range: $3,300-$3,500: A True "Golden Opportunity"
First Resistance Level: $4,030-$4,040
Strong Resistance Level Above: $4,080-$4,130
First Support Level Below: $3,960-$3,980
Strong Support Level Below: $3,940-$3,950
Range Judgment: $3,950-$4,200 – A break above $4,200 would allow bulls to regain control; a break below $3,950 would see bears continue their sweeping attack.
Strategy: The primary strategy is to sell on rallies (consistent with the medium-term trend).
Given the unchanged downtrend, selling on rallies to resistance levels is a relatively high-probability strategy.
Entry Range: If the weekly chart shows… gold prices open higher near $4,030-$4,040 but subsequently encounter resistance, a small short position can be established.
Adding to Positions Recommendation: Consider adding to your position if gold prices rebound above $4080 and then fall back.
First Target Price: $4000-$3980
Second Target Price: $3960-$3940
Stop-Loss: Above $4050
This week, the market taught us a lesson: in an era where oil prices can even "change" gold's trajectory, both die-hard bulls and bears will be utterly crushed by the market.
Gold has now become a "hostage" of the Federal Reserve; a single day's rise in oil prices can put gold in a difficult position.
At the $4000 level, a fierce tug-of-war is underway between bulls and bears. We shouldn't be the first to rush in and become cannon fodder, nor should we be the last fool to run away. Monday's strategy can be summarized in one sentence: Don't chase the price above $4030, and don't chase the price below $3960. Buy low and sell high, take a small profit and leave.
This round of correction is not about courage, but about patience.
The real "golden opportunity" will not come today, nor will it come tomorrow; it may come when everyone can no longer hold on.
Gold prices fell 2.6% this week, marking the largest weekly drop in six weeks.
The rebound is real, but has the trend reversed? It's too early to draw conclusions.
As shown in the chart: We remain bearish on gold prices.
The US has launched airstrikes against Iran for the seventh consecutive night, with both sides expanding the scope of their attacks. The US attacked bridges in Iran, while Iran attacked power and desalination facilities in Kuwait.
US-Iran conflict → Soaring oil prices → Soaring inflation → Rising expectations of interest rate hikes → Falling gold prices
Although gold prices have corrected nearly 30% from their highs, net long positions in the market remain near historical highs, and institutional long positions are highly concentrated.
What does this mean?
The market is well-funded, and the risk of long positions "uncoupling" remains. If the market continues to correct, these funds may further liquidate their positions and exit the market, thereby exacerbating market volatility.
$4,000 is a key psychological level. If gold prices break below this level and continue to fall, short-term downward pressure could intensify.
Conversely, this also indicates strong support below.
Technical Analysis: The short-term rebound is a "correction," not a "reversal."
The biggest problem facing gold is not whether the price decline is sufficient, but whether the correction period is insufficient.
Previous upward cycle: 121 weeks
Current correction to date: Only 24 weeks
Historically, a correction needs to be at least 38.2% of a sustained upward cycle, or approximately 46 weeks, to be considered sufficient.
In other words, gold prices could fluctuate within the $3600 to $4400 range for more than six months.
Expected Range: $3,300-$3,500: A True "Golden Opportunity"
First Resistance Level: $4,030-$4,040
Strong Resistance Level Above: $4,080-$4,130
First Support Level Below: $3,960-$3,980
Strong Support Level Below: $3,940-$3,950
Range Judgment: $3,950-$4,200 – A break above $4,200 would allow bulls to regain control; a break below $3,950 would see bears continue their sweeping attack.
Strategy: The primary strategy is to sell on rallies (consistent with the medium-term trend).
Given the unchanged downtrend, selling on rallies to resistance levels is a relatively high-probability strategy.
Entry Range: If the weekly chart shows… gold prices open higher near $4,030-$4,040 but subsequently encounter resistance, a small short position can be established.
Adding to Positions Recommendation: Consider adding to your position if gold prices rebound above $4080 and then fall back.
First Target Price: $4000-$3980
Second Target Price: $3960-$3940
Stop-Loss: Above $4050
This week, the market taught us a lesson: in an era where oil prices can even "change" gold's trajectory, both die-hard bulls and bears will be utterly crushed by the market.
Gold has now become a "hostage" of the Federal Reserve; a single day's rise in oil prices can put gold in a difficult position.
At the $4000 level, a fierce tug-of-war is underway between bulls and bears. We shouldn't be the first to rush in and become cannon fodder, nor should we be the last fool to run away. Monday's strategy can be summarized in one sentence: Don't chase the price above $4030, and don't chase the price below $3960. Buy low and sell high, take a small profit and leave.
This round of correction is not about courage, but about patience.
The real "golden opportunity" will not come today, nor will it come tomorrow; it may come when everyone can no longer hold on.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.